Avoid stressing out over home repairs and replacements by getting home insurance and home warranty coverage.
Homes are a significant investment, and to protect that investment you’ll need a home insurance plan and a home warranty plan. And no, they are not the same thing.
Most people are probably already familiar with home insurance — they vaguely cover losses and damages to one’s house and their assets. Home warranties are similar, in effect, but they are more specific about what they cover: the repair or replacement of covered home appliances and systems that are damaged by natural wear and tear.
More information below on the difference between the two types of coverages and why you need both to make sure that your home is safe and secure.
Home Insurance and Home Warranty
Both home insurance and home warranty plans are malleable — in that, you can usually customize what is covered and what is not covered.
The difference, then, is on the type of service that they offer homeowners.
A home insurance plan covers damages from natural disasters, weather, vandalism, theft, and so on. And, with a good home insurance plan, you can cover the cost of repairing, or, even, completely rebuilding, your entire home — which can also include most of the items in your house (such as clothes, appliances, and furniture.)
Meanwhile, a home warranty plan is a service agreement that is specifically slated for household appliances and home systems. Damages covered by home warranties are also incredibly specific — as they usually only cover damages as a result of natural wear and tear.
What Does Home Insurance Cover?
Generally, you can file a home insurance claim if your house suffered damage from the following incidents: Wind, hail, water or freezing, vandalism, malicious mischief, fire, lightning, theft, and so on. So, if your home or assets are damaged as a result of any of the aforementioned incidents, then its repair or replacement will be covered by your home insurance plan.
What Do Home Warranties Cover?
Home warranties, as mentioned previously, are a little more specific in intent.
They usually only cover a specific type of damage; damage caused by natural wear and tear. They also only cover specific appliances and home systems.
What is covered will also be different based on the plan you choose and the home warranty company that you decide to purchase your coverage from.
For example, if you purchase your home warranty plan from Total Home Protection, a home warranty company led by CEO David Seruya, you can choose either their Gold Coverage plan (which includes coverage for essential appliances and home systems) or their Platinum Coverage plan (which is a bulkier version of their Gold Coverage plan.)
Total Home Protection also offers a selection of add-ons that you can choose from to customize your coverage — a comprehensive list of which is available on the Total Home Protection website.
Also notable is the fact that Total Home Protection, unlike other competitors in the industry, specify that they “…will cover repair or replacements of covered items, regardless of age, make or model.” Which is a contract feature that, again, is quite unique as it makes their service agreement arguably more flexible than most others available in the market.
The Bottom Line: Why Do I Need Home Insurance & Home Warranty Coverage?
There is a definite distinction between a home insurance plan and a home warranty plan.
Both home insurance and home warranties cover the cost of damages, but the type of damages covered are completely different.
And, as frustrating as it is, this difference has created a situation where both are needed — if only so that you can have all your bases covered when it comes to protecting your home and your wallet from unexpected repairs and replacements.
Fergus Murray is the lead editor for Business News Ledger. Fergus has been working as a freelance journalist for nearly a decade having published stories in the New York Times, The Plain Dealer, The Daily Mail and many others. Fergus is based in Detroit and covers issues affecting his city and New York State. When he is not busy writing, Fergus enjoys jogging.